BA and LY have been milking this route for so long now. I travel to TLV quite often and am always amazed at the price of the ticket for such a short flight. You can often pick up a LAX return for about the same if not less then a TLV, its just ridic!
Once BMI start the route, I am sure prices will drop, maybe the hike is aimed to get the last bit of honey out of the pot?